March 13, 2017

Starting a conversation on taxes on the 1 percent

ByDaymon Ely | March 13, 2017

On Saturday night, March 11, 2017, I started a long overdue conversation on the floor of the House. For the past 14 years, New Mexico tried an experiment—we cut personal and corporate income taxes to see if jobs would flow into the state. The experiment failed. Jobs and people left the state. Revenues tumbled. Schools, public safety and infrastructure were decimated. And the tax burden rose sharply on lower and middle class wage earners.

Two states that have recently been in the news—Kansas and Minnesota—have both taken steps to fix the problem. In Minnesota, for example, personal income taxes were increased by 2 percent on the highest income earners, with dramatic results. Job growth is way up, the deficit has been eliminated and services have dramatically improved.

Daymon Ely is a Democratic State Representative from Albuquerque in House District 23.

I proposed a modest tax increase – a 1 percent increase in taxes on those individuals making more than $306,000. This means that for every dollar in net income over $306,000, the taxpayer pays one cent. The money will help pay for better schools, better paid teachers and public safety. The Republicans rejected the bill out of hand and defeated it on a technicality. Despite all the evidence in front of us, the Republicans continue to cling to the notion that somehow this will eventually work. It won’t.

Just to be clear, the idea of tax cuts generating jobs started as a bi-partisan effort. But now, 14 years later, we must admit that if tax cuts had worked, New Mexico should have been flooded with jobs. We cut personal income tax levels for the top 1 percent of wage earners by nearly one-half. We cut corporate tax levels as well. And instead of creating jobs and generating revenue the opposite has happened.

While arguing on the House floor for this modest tax increase, the Republicans proclaimed that it was the wealthy in our society that are the most productive, are the job creators and raising their taxes will cause them to move.

On these points, I could not disagree more strongly. Until I took this job as a legislator, I would have been considered part of the top 1 percent. I have friends that are part of the top 1 percent. We run small businesses. We hire local workers. We generate revenue for the state. I can tell you that most of us would agree to pay more in taxes if it meant that those dollars would lead to better services for everyone.

And as far as the wealthy being the most productive members of our state, tell that to the hard-working educators, construction workers, childcare providers, and so many more who keep our state running.

As for job creators leaving the state, our experience and that of other states, leads to the exact opposite conclusion. If we raise taxes and wisely spend the revenue on creating excellent public schools and a first-class infrastructure supporting businesses, good jobs will follow.

What will work and what will make our state better is quality, not tax cuts.

It has taken a long time for this conversation to start. Hopefully it won’t take as long for lawmakers to realize it is time to properly fund our schools, public safety efforts and roads.